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3:13 pm
Thu June 28, 2012

Local Health Care: The Law's Impact On States

Originally published on Thu June 28, 2012 6:32 pm

Transcript

AUDIE CORNISH, HOST:

The Supreme Court's ruling effectively ends the state of limbo the health law has been in for months now. The court upheld almost the entire health law. It decided the most controversial feature, the so-called individual mandate that requires most people to either have insurance or pay a penalty, is constitutional. Chief Justice Roberts, who wrote the opinion for the five justice majority, said the mandate is okay because the penalty is a tax.

And here to talk more about what comes next is NPR's Julie Rovner. And what does happen now, Julie?

JULIE ROVNER, BYLINE: Well, now a clock starts ticking. Most of the key provisions take effect 18 months from now. A lot of the key decisions are going to have to be made by the state, who are actually responsible for most of the coverage expansion. In fact, about half of the 30 million people who are currently uninsured and expected to gain coverage through this law, will get it through those new marketplaces called insurance exchanges.

The other half will get it through an expansion of the Medicaid program. Both of those will be run in whole or part by the states.

CORNISH: And break it down. How will those health exchanges work?

ROVNER: Well, states already have a choice about whether or not to create an exchange. If they do - and about a dozen states are pretty far along in the process - then they will create a place where small businesses and individuals can go to compare plans, get their eligibility confirmed and purchase that coverage. If a state decides it doesn't want to operate its own exchange, the federal government will come in and run it for them.

CORNISH: So with today's decision that the law goes forward, how long do states get to actually make this decision?

ROVNER: They have until mid-November, just a couple of days after the election, in fact. If they go ahead, they have to be ready, up and operating by the fall of 2013. A lot of people are worried that even of the states that want to do it and are underway won't be ready on time. It's a very complicated undertaking.

CORNISH: And now, Medicaid, we talked about this yesterday and it turns out this is the one place the court did scale back the law.

ROVNER: Yes, much to the surprise of many observers. The court said the federal government cannot threaten to take away all of a state's Medicaid fund if it fails to expand the program to everyone's income under 133 percent of poverty, that's about $15,000 for an individual. But it didn't strike down the expansion. The court just said it would be voluntary, that basically states could do the expansion or not.

If they don't do it, they won't stand to lose all the rest of their Medicaid funding.

CORNISH: Now, analysts said that this could have - that the ruling could have an impact on the relationship between states and the federal government if the court ruled that the federal government was coercing states with the requirements for Medicaid. Are they still worried about that?

ROVNER: Well, I've talked to a few people today who said not so much, that what the court did was kind of create a unique circumstance that treated this expansion as if it was sort of a whole new Medicaid program. And just as the regular Medicaid program is voluntary for the states, so will this one be.

CORNISH: So will some states now get to decline to expand their Medicaid program? Can they do that?

ROVNER: They could, but there's several reasons why they probably won't. One is that the vast majority of the funding, all of it for the first few years, comes from the federal government, so it's free money. Another is that there's a quirk in the law that people who are above the current Medicaid eligibility threshold, but below that 100 percent of poverty aren't eligible to get subsidies in the new exchanges.

So if the states don't do the Medicaid expansion, they'll have a lot of low-income, uninsured people with no way to get coverage. I think that would make a lot of people upset.

CORNISH: Lots of surprises here. Julie, thanks so much for talking with us.

ROVNER: You're welcome. Transcript provided by NPR, Copyright National Public Radio.